Preview
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NYSCEF DOC. NO. 24 RECEIVED NYSCEF: 08/12/2018
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
__________________________________________
:
DANIEL L. SCHWARTZ, :
:
Plaintiff, :
:
– against – : Index No.: 651460/2018
:
WINSLOW & COMPANY LLC, :
W & CO REAL ESTATE LLC, :
WAYNE JOSHUA WINSLOW, and :
ILONA WINSLOW, :
:
Defendants. :
__________________________________________:
PLAINTIFF’S MEMORANDUM OF LAW
IN OPPOSITION TO DEFENDANTS’ MOTION
TO DISMISS THE AMENDED COMPLAINT
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TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES..................................................................................................................... iii
PRELIMINARY STATEMENT ................................................................................................................ 1
ARGUMENT ............................................................................................................................................... 5
I. PLAINTIFF’S BREACH OF CONTRACT CLAIM SHOULD NOT BE
DISMISSED .................................................................................................................................... 5
A. Plaintiff Has Properly Pleaded a Valid and Binding Agreement ........................................ 5
1. The Parties’ Course of Dealing Evidences a Binding Agreement ......................... 5
2. Plaintiff Does Not Concede that the Agreement is Unsigned ................................ 7
3. Defendants’ Deliberate Spoliation of Evidence of the Agreement
Weighs Heavily Against Dismissal ....................................................................... 8
B. The Agreement Does Not Violate the Statute of Frauds .................................................... 9
1. The Agreement is a “Duly Licensed Real Estate Broker”
Contract and is Not Subject to the Statute of Frauds ........................................... 10
2. The Agreement is Capable of Being Performed Within One Year...................... 11
II. PLAINTIFF’S CLAIMS FOR CONVERSION, UNJUST ENRICHMENT,
QUANTUM MERUIT AND PROMISSORY ESTOPPEL SHOULD NOT
BE DISMISSED ........................................................................................................................... 12
A. Plaintiff Properly Pleads These Claims in the Alternative ............................................... 12
B. None of the “Quasi-Contractual” Claims Should Be Dismissed ...................................... 13
1. Unjust Enrichment and Quantum Meruit are Properly Pleaded .......................... 13
2. Promissory Estoppel is Properly Pleaded ............................................................ 14
3. Conversion is Properly Pleaded ........................................................................... 15
III. PLAINTIFF’S STATUTORY CLAIMS SHOULD NOT BE DISMISSED ........................... 15
IV. PLAINTIFF’S CLAIMS AGAINST INDIVIDUAL DEFENDANTS JOSH
WINSLOW AND ILONA WINSLOW SHOULD NOT BE DISMISSED ............................. 17
A. The Individual Defendants May Be Held Personally Liable Under New
York Law .......................................................................................................................... 18
B. Plaintiff Properly Pleads a Basis for Personal Liability Against the
Individual Defendants ....................................................................................................... 20
CONCLUSION .......................................................................................................................................... 21
ii
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TABLE OF AUTHORITIES
Page(s)
Cases
Ackerman v. Vertical Club Corp.
94 A.D.2d 665 (1st Dep’t 1983) ...................................................................................................... 18
Allianz Underwriters Ins. Co. v. Landmark Ins. Co.
13 A.D.3d 172 (1st Dep’t 2004) ........................................................................................................ 5
Amaro v. Gani Realty Corp.
60 A.D.3d 491 (1st Dep’t 2009) ........................................................................................................ 5
Brown Bros. Electrical Contractors, Inc. v. Beam Construction Corp.
41 N.Y.2d 397 (1977) .......................................................................................................................... 6
Buckley v. 112 Central Park South
136 N.Y.S.2d 233 (1st Dep’t 1954) ........................................................................................... 18, 20
Capin & Associates, Inc. v. 599 West 188th Street, Inc.
2015 Slip Op 30386[U] (Sup. Ct., N.Y. Cnty. 2015) ........................................................ 12, 13, 19
Chan v. Kwok
2016 Slip Op 31538[U] (Sup. Ct., N.Y. Cnty. 2016) ...................................................................... 6
Cron v. Hargro Fabrics
91 N.Y.2d 362 (1998) ........................................................................................................................ 11
Curtis Props. Corp. v. Greif Cos.
236 A.D.2d 237 (1st Dep’t 1997) .................................................................................................... 13
Day Realty Corp. v. Chera
308 A.D.2d 148 (1st Dep’t 2003) .................................................................................................... 12
Flores v. Lower East Side Service Center, Inc.
4 N.Y.3d 363 (2005) ............................................................................................................................ 6
Hoag v. Chancellor, Inc.
246 A.D.2d 224 (1st Dep’t 1998) .............................................................................................. 18, 19
Jenach v. Rabizadeh
22 N.Y.3d 470 (2013) ........................................................................................................................ 10
Joseph Sternberg, Inc. v. Walber 36th Street Association
187 A.D.2d 225 (1st Dep’t 1993) .................................................................................................... 13
Kowalchuk v. Stroup
61 A.D.3d 118 (1st Dep’t 2009) ........................................................................................................ 6
Lorio v. Northern Building Products, Inc.
iii
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2008 N.Y. Slip Op 30477 (Sup. Ct., N.Y. Cnty. 2008) ................................................................ 13
MatlinPatterson ATA Holdings LLC v. Fed. Express Corp.
87 A.D.3d 836 (1st Dep’t 2011) ...................................................................................................... 14
Mayer v. Marron
2015 Slip Op 32811[U] (Sup. Ct., N.Y. Cnty. 2015) ........................................................ 5, 6, 7, 14
Morris Cohon & Co. v. Russell
23 N.Y.2d 569 (1969) ........................................................................................................................ 10
Niyazov v. Park Fragrance, LLC
2017 Slip Op 30610[U] (Sup. Ct., N.Y. Cnty. 2014) ...................................................................... 5
Options Group, Inc. v. Vyas
91 A.D.3d 446 (1st Dep’t 2012) ........................................................................................................ 6
Ortega v. City of New York
9 N.Y.3d 69 (2007) .............................................................................................................................. 9
Payne v. White
101 A.D.2d 975 (3rd Dep’t 1984).................................................................................................... 15
Pegasus Aviation I, Inc. v. Varig Logistica S.A.
26 N.Y.3d 543 (2015) .......................................................................................................................... 9
Polargrid LLC v. Videsh Sanchar Nigam Ltd.
2006 WL 903184 (S.D.N.Y. April 7, 2006) ................................................................................... 14
Posson v. Przestrzelski
111 A.D.3d 1235 (3rd Dep’t 2013) ................................................................................................. 10
Puppa v. G. Garrity Contr. Corp.
2017 Slip Op 30654[U] (Sup. Ct., N.Y. Cnty. 2017) ...................................................................... 6
Raptis v. Giamo/Eisidler Real Estate Services, Inc.
2010 N.Y. Slip Op. 32097 (Sup. Ct., N.Y. Cnty. 2010) ............................................................... 15
Resource Finance Co. v. Cynergy Data LLC
106 A.D.3d 562 (1st Dep’t 2013) .................................................................................................... 13
Sage Realty Corp. v. Proskauer Rose
275 A.D.2d 11 (1st Dep’t 2000) ........................................................................................................ 8
Saran v. Shanghai Chengtou (USA), LLC
2018 Slip Op 30292[U] (Sup. Ct., N.Y. Cnty. 2018) .............................................................. 10, 13
Serbetcioglu v. R.N. Joseph Fine Jewelry LLC
NY Slip Op 30687[U] (Sup. Ct., N.Y. Cnty. 2011) ...................................................................... 19
Sibbald v. Bethlehem Iron Co.
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83 N.Y. 378 (1881) ............................................................................................................................ 12
Skillgames, LLC v. Brody
1 A.D.3d 247 (1st Dep’t 2003)........................................................................................................... 5
Steve Elliot, LLC v. Foxboro Productions
28 Misc.3d 38 (2nd Dep’t 2010) ...................................................................................................... 10
Strategic Alliance Partners, LLC v. Dress Barn
386 F. Supp.2d 312 (2005) ............................................................................................................... 13
U.S. Bank National Association v. Greenpoint Mortgage Funding, Inc.
94 A.D.3d 58 (1st Dep’t 2012)........................................................................................................... 9
Walkovsky v. Carlton
18 N.Y.2d 414 (1966) ........................................................................................................................ 19
Zubulake v. UBS Warburg LLC
220 F.R.D. 212 (S.D.N.Y. 2003) ....................................................................................................... 9
Statutes
C.P.L.R. § 301 ............................................................................................................................................ 21
C.P.L.R. § 3017 ................................................................................................................................ 4, 12, 17
C.P.L.R. § 3211 ................................................................................................................................... passim
New York General Obligations Law § 5-701 ............................................................................. 9, 10, 11
New York City Administrative Code, Title 20, Chapter 10 ................................................. 1, 4, 15, 16
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PRELIMINARY STATEMENT
Plaintiff Daniel L. Schwartz (“Plaintiff”) respectfully submits this memorandum of law (the
“Opposition Memo”) in opposition to the motion to dismiss the amended complaint (the “Complaint”) of
defendants Winslow & Company, LLC (“Winslow & Company”), W & Co Real Estate LLC (“W &
Co”), Wayne Joshua Winslow (“Josh Winslow”) and Ilona Winslow (together “Defendants”).
Defendants’ chief argument in support of dismissal is that Plaintiff’s Complaint is based on an
“undated and unsigned” writing that is not binding, and violates the Statute of Frauds. Memorandum of
Law in Support of Defendants Winslow & Company LLC, W & Co Real Estate LLC, Wayne Joshua
Winslow, and Ilona Winslow’s Motion to Dismiss (hereinafter “Def. Memo”) at 1. Defendants’ argument
misreads the Complaint, neglects almost entirely to read the law, and is fatally flawed on multiple
grounds.
In fact, Defendants’ very starting premise, that “Plaintiff’s entire theory of recovery is based on
an undated ‘contract,’” Def. Memo at 2, is wishful thinking. This action has not one, but three, key
themes.
First, it is indeed a nonpayment action, premised on Defendants’ deliberate breach of a binding
written agreement. Plaintiff has been paid nothing to date at least three commercial real estate deals he
brokered while working for Winslow & Company, and only partly paid on another, where Defendants
helped themselves to all of their own commissions and all of Plaintiff’s commissions too. Second, this is
an action about wrongful retaliation and illegal labor practices in violation of New York’s Freelance Isn’t
Free Act. Defendants not only completely refused to pay Plaintiff any commissions, but also pressured,
threatened, intimidated, and ultimately fired him merely for trying to recover them. Third, this is an action
about Defendants’ intentional spoliation of evidence. Defendants destroyed emails to hide evidence of
Plaintiff’s agreement and the commissions they owe him. Their arguments, and the Court’s disposition of
the present motion to dismiss, must be read in the light of this damning and highly culpable conduct.
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Defendants never dispute that Plaintiff worked as a broker for Winslow & Company for almost
ten years. They never dispute that Plaintiff performed all of the work he claims on all of the relevant real
estate deals. They do not dispute that all the deals closed, or that Defendants received all of the
commissions in question. And they do not dispute that Plaintiff has received zero commissions to date or
that he has faced unconscionable conduct trying to recover those commissions. Read in this light,
Defendants’ myopic reliance on an “unsigned” agreement is a revealing self-indictment.
The parties’ agreement is binding.
First, Plaintiff pleads sufficient facts demonstrating a valid and binding agreement, in particular,
that the parties honored the July 5, 2016 agreement (the “Agreement”) via their ensuing course of
conduct. Compl. ¶¶ 25-27. Plaintiff pleads a specific time period of at least six months (July 2016 until at
least December 2016, Compl. ¶ 26), and enumerates a series of commercial real estate deals he brokered
(“Laruicci,” “RDW,” “Wellpass,” “Sequoia” and others, Compl. ¶ 27), in which Defendants honored the
core material term of the Agreement – the commission split. Under settled New York law, this is more
than sufficient evidence of agreement for Plaintiff to ultimately prevail on his breach of contract claim,
and certainly more than adequate for Plaintiff to survive a motion to dismiss under CPLR § 3211(a)(7).
New York courts have repeatedly held that evidence of the parties’ conduct in honoring an agreement is
weightier than an unsigned writing in determining that a binding agreement exists. See infra Section
I.A.1, pp. 5-7.
Second, Defendants’ argument misreads the Complaint, for Plaintiff has not pleaded that the
parties never signed the Agreement. Instead, Plaintiff pleads (a) that a valid and binding written contract
exists, Compl. ¶ 66; (b) that Defendants intentionally destroyed evidence of that contract prior to
Plaintiff’s filing of this action, by hunting for and deleting emails (including the very email reflecting the
Agreement) from Winslow & Company email accounts, Compl. ¶¶ 56-64; and (c) that Plaintiff was
nevertheless able to retain and attach the copy of the Agreement attached as Exhibit A of the Complaint,
which is unsigned, Compl. ¶ 5.
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To be clear, it is ultimately of no consequence whether or not the Agreement was signed, because
(a) the parties have honored the Agreement in fact, see infra Section I.A.1, pp. 5-7; and (b) a signed
writing is not required in the context of a real estate brokerage agreement, see infra Section I.B.1, pp. 10-
11. Nevertheless, by arguing that no signed writing exists, Defendants address themselves to the
complaint they imagine Plaintiff has submitted, rather than the Complaint Plaintiff actually has submitted.
Defendants’ argument, based on their error in reading the Complaint, should be rejected. See infra Section
I.A.2, p. 7.
Third, Defendants’ arguments to dismiss the breach of contract claim must be considered in light
of their intentional spoliation of evidence. Defendants should not be permitted to benefit from their
misconduct by arguing that a signed writing does not exist after intentionally destroying evidence of that
Agreement. Ample remedies exist under New York law for addressing Defendants’ intentional spoliation
of evidence, which Plaintiff expects to raise at the appropriate juncture. In the meanwhile, Plaintiff should
be permitted to proceed with his breach of contract claim. See infra Section I.A.3, pp. 8-9.
The Statute of Frauds does not apply to this agreement.
Defendants’ argument that Plaintiff’s breach of contract claim violates the Statute of Frauds is
simply wrong on the law. Real estate broker agreements are specifically excluded from the Statute, and
are fully enforceable when not in writing. But even if the Statute could rightly be invoked here, the
Agreement is capable on its face of being performed within a year, and therefore still would satisfy the
Statute of Frauds. See infra Section I.B, pp. 9-11.
Plaintiff’s additional common law claims are well-pleaded.
In addition to claims for breach of contract and the implied duty of good faith and fair dealing,
Plaintiff brings common law claims for (1) conversion; (2) unjust enrichment; (3) quantum meruit; and
(4) promissory estoppel. Defendants’ half-hearted response to all four of these common law claims is that
they are duplicative of, and/or barred by, his breach of contract claim. That is not the case.
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Plaintiff pleads his common law claims in the alternative. Under CPLR § 3017(a), and considered
here on a pre-discovery motion to dismiss pursuant to CPLR § 3211(a), pleading claims in the alternative
is standard and permitted. The larger context here also bears repeating: Plaintiff has been paid nothing on
at least three deals he brokered while working for Winslow & Company, and only partially paid on
another. Even if Plaintiff’s breach of contract claim were somehow to fail (and it is unclear on what basis
it would fail), Defendants would still remain in possession of more than half a million dollars of
brokerage fees Plaintiff unquestionably earned while working in association with Winslow & Company.1
His claims for conversion, unjust enrichment, quantum meruit and promissory estoppel are therefore
necessary and appropriate in order to ensure recovery of the unpaid fees. As each of these claims is well-
pleaded – each of the elements of the cause of action is properly made out under the allegations of the
Complaint – none should be dismissed. See infra Section II, pp. 11-15.
The statutory claims for retaliation and wrongful payment practices are well-pleaded.
Plaintiff seeks approximately two million dollars, plus costs, for violations of Title 20, Chapter 10
of New York City’s Administrative Code, the Freelance Isn’t Free Act, which protects freelance workers
from unfair retaliation and other wrongful payment practices. Despite alleging conduct that is textbook-
tailored to fit the prohibitions of the statute, Defendants argue that Plaintiff’s allegations are “conclusory
and devoid of any factual support.” Opp. Memo at 7.
It bears asking what degree of detail Defendants would not label as “conclusory and devoid of
factual support.” Plaintiff’s pleadings are highly detailed as to the wrongful payment practices and
retaliatory actions Defendants have taken against him. First and foremost, Defendants terminated Plaintiff
from his association with Winslow & Company for trying to obtain his fees, conduct that is specifically
prohibited by the statute. Several other acts are alleged in detail. See infra Section III, pp. 15-17.
1
Note that this remains true even based upon Defendants’ answer to Plaintiff’s original (pre-amended) complaint
(the “Answer”), in which Defendants contend that an earlier 2008 written agreement governs the parties. Plaintiff
would still be owed several hundred thousand dollars under this prior agreement, assuming it was ever effective and
had not been superseded. Plainly this action should not be dismissed under the circumstances.
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The individual defendants, Josh and Ilona Winslow, are personally liable for acts taken
outside the scope of their agency.
Defendants are incorrect in their assertion that the individual defendants, Josh and Ilona Winslow,
cannot be held liable here. While it is true that they may not be held liable for breach of contract,
Plaintiff’s claims for breach of contract are not even directed against them. Instead, Josh and Ilona
Winslow are individually liable for illegal and predatory acts taken for their personal gain, and outside the
scope of their agency as owners and officers of Winslow & Company. These acts include harassment and
retaliation against Plaintiff in violation of New York statute, and deliberate destruction of evidence
relevant to this action. Plaintiff’s claims against the individual defendants rest on well-settled law and
should not be dismissed. See infra Section IV, pp. 17-20.
ARGUMENT
In determining a motion to dismiss for failure to state a cause of action, the court must accept as
true the facts alleged in the complaint, as well as all reasonable inferences that may be gleaned from those
facts. Skillgames, LLC v. Brody, 1 A.D.3d 247, 250 (1st Dep’t 2003); Amaro v. Gani Realty Corp., 60
A.D.3d 491 (1st Dep’t 2009); Niyazov v. Park Fragrance, LLC, 2017 Slip Op 30610[U], *2 (Sup. Ct.,
N.Y. Cnty. 2014). The complaint must be construed in the light most favorable to the plaintiff. Mayer v.
Marron, 2015 Slip Op 32811[U], *3 (Sup. Ct., N.Y. Cnty. 2015) (citing Allianz Underwriters Ins. Co. v.
Landmark Ins. Co., 13 A.D.3d 172, 174 (1st Dep’t 2004)). The court is not permitted to assess the merits
of the complaint or any of its factual allegations, but may only determine if,assuming the truth of the
facts alleged, the complaint states the elements of a legally cognizable cause of action. Niyazov, 2017 Slip
Op 30610[U], *2.
I. PLAINTIFF’S BREACH OF CONTRACT CLAIM SHOULD NOT BE DISMISSED
A. Plaintiff Has Properly Pleaded a Valid and Binding Agreement
1. The Parties’ Course of Dealing Evidences a Binding Agreement
Defendants argue the Agreement is unenforceable against them because it is “undated and
unsigned,” Def. Memo at 1, but their argument is flatly contradicted by longstanding precedent from New
York’s Court of Appeals, as well as this Department, holding that an unsigned agreement is enforceable if
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so demonstrated by the parties’ course of dealing. Brown Bros. Electrical Contractors, Inc. v. Beam
Construction Corp., 41 N.Y.2d 397 (1977) (finding the “course of conduct and communications” between
the parties “created a legally enforceable agreement,” despite an unsigned contract); Flores v. Lower East
Side Service Center, Inc., 4 N.Y.3d 363, 368-69 (2005) (“[w]e have long held that a contract may be valid
even if it is not signed by the party to be charged . . . an unsigned contract may be enforceable, provided
there is objective evidence establishing that the parties intended to be bound”) (citations omitted); Options
Group, Inc. v. Vyas, 91 A.D.3d 446, 447 (1st Dep’t 2012) (“even if plaintiff never formally executed the .
. . [agreement], the record demonstrates that both parties intended to be bound by the agreement, and it is
therefore enforceable”); Kowalchuk v. Stroup, 61 A.D.3d 118, 125 (1st Dep’t 2009) (finding emails
among the parties and a partially executed agreement sufficient evidence of contract); Mayer v. Marron,
2015 Slip Op 32811[U], *7 (Sup. Ct., N.Y. Cnty. 2015) (finding emails and unsigned agreement
sufficient evidence of agreement to survive motion to dismiss).
In determining whether an unsigned writing has formed the basis of an agreement between the
parties, courts must look to the course of dealing between the parties. Puppa v. G. Garrity Contr. Corp.,
2017 Slip Op 30654[U], *9 (Sup. Ct., N.Y. Cnty. 2017) (“[i]n determining whether the parties entered
into a contractual agreement and what were its terms, it is necessary to look . . . to the objective
manifestations of the intent of the parties as gathered by their expressed words and deeds”) (quoting
Flores, 4 N.Y.3d at 369); Chan v. Kwok, 2016 Slip Op. 31538[U], *4 (Sup. Ct., N.Y. Cnty. 2016) (“[t]he
parties’ course of conduct may be looked at to ‘determine whether there was a meeting of the minds
sufficient to give rise to an enforceable contract’”) (quoting Flores, 4 N.Y.3d at 370).
Here, the Complaint is crystal clear in showing an enforceable agreement stemming from the July
5, 2016 email and attached independent contractor agreement, and subsequent dealings between the
parties. In the email, defendant Josh Winslow writes, in relevant part, “Here is what we decided. If you
agree, starting immediately your split will be as follows.” Compl. ¶ 24 (emphasis added). Mr. Winslow
then inlines the commission split – which is the very raison d’être of the entire agreement – into the
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email, with the same commission split then repeated in the attached independent contract agreement.
Compl. ¶ 24; Exhibit A at p. 6.
While this email message alone speaks powerfully to the existence of an agreement, an
enforceable agreement becomes incontrovertible based on the parties’ subsequent conduct. The parties
immediately honor the commission split in the Agreement for at least the next six months, over a series of
deals that are cited by name in the Complaint. Compl. ¶¶ 25-27. Finally, Defendants’ spoliation of
evidence of the Agreement is itself conduct attesting to the validity of the Agreement, as Defendants
would have no motivation to search for and delete evidence of a contract that was a nullity.
As the Complaint is more than sufficient on its face to state a claim for breach of contract based
on the parties’ dealings, Plaintiff’s first cause of action for breach of contract should not be dismissed.
2. Plaintiff Does Not Concede that the Agreement is Unsigned
As discussed above, Defendants argue Plaintiff’s “entire theory of recovery” here is based on an
unsigned contract. In fact, Plaintiff has not pleaded that the contract is unsigned, and discovery would be
required in order to determine this issue of fact. Plaintiff’s argument is that the contract is binding
whether or not it is signed.
For purposes of the present motion, however, it would be error to dismiss the Complaint on the
basis of an “unsigned” contract when Plaintiff does not plead an unsigned contract, for the Complaint
must be construed in the light most favorable to the plaintiff. Mayer v. Marron, 2015 Slip Op 32811[U],
*3 (Sup. Ct., N.Y. Cnty. 2015).
The instrument attached as Exhibit A of the Complaint is the copy of the Agreement that was
available to Plaintiff upon commencing this action, and that instrument is indeed unsigned. Compl. ¶ 5.
However, Plaintiff pleads that Defendants deleted a copy of the email reflecting the Agreement, Compl. ¶
5, and that Defendants ripped up a paper copy of the Agreement during a meeting on October 4, 2017,
and threw it in his face, Compl. ¶ 36. It is not know to Plaintiff what other copies of the Agreement may
exist, what other copies of the Agreement may or may not have been hidden or destroyed, or whether a
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signed copy of the Agreement will ultimately ever be located. As Plaintiff’s theory of recovery does not
depend on a signed writing anyway, the breach of contract claim should not be dismissed on the basis of
an “unsigned” writing.
3. Defendants’ Deliberate Spoliation of Evidence of the Agreement Weighs
Heavily Against Dismissal
Defendants have the temerity to argue Plaintiff’s breach of contract claim should be dismissed on
the basis of an “undated and unsigned” agreement after they intentionally destroyed evidence of that
agreement by systematically deleting Plaintiff’s Winslow & Company emails, including the email
reflecting the Agreement.
Dismissing Plaintiff’s claim for breach of contract under these circumstances would be
inequitable, because it would permit Defendants to benefit from their wrongful actions as spoliators. See
Sage Realty Corp. v. Proskauer Rose, 275 A.D.2d 11, 16-18 (1st Dep’t 2000) (“elementary fairness”
warranted finding against spoliator where “the deliberate nature of the conduct . . . effectively impede[d]
the ability of the deprived party to assert a claim or defense”). Plaintiff is, instead, entitled to the benefit
of discovery in seeking all available evidence of the Agreement, as well as all available evidence of its
destruction by Defendants. Permitting the breach of contract claim to proceed also permits Plaintiff to
seek those remedial actions that are available to him on the basis of the spoliation, and which this court
holds the power to order, at an appropriate time.2
As New York’s Court of Appeals has previously observed:
When parties involved in litigation engage in the destruction of evidence, a number of
remedial options are provided by existing New York statutory and common law. Under
CPLR 3126, if a court finds that a party destroyed evidence that ‘ought to have been
2
Cf. CPLR § 3211(d), which states: “Facts unavailable to opposing party. Should it appear from affidavits submitted
in opposition to a motion made under subdivision (a) or (b) that facts essential to justify opposition may exist but
cannot then be stated, the court may deny the motion, allowing the moving party to assert the objection in his
responsive pleading, if any, or may order a continuance to permit further affidavits to be obtained or disclosure to be
had and may make such other order as may be just.” Here, Plaintiff has not elected to submit additional affidavits
because his pleadings suffice in identifying facts that are unavailable to him due to Defendants’ spoliation.
Nevertheless, the Court should similarly deny Defendants’ motion, as is counseled by CPLR § 3211(d), on the basis
of Plaintiff’s Complaint. Defendants may then assert their argument of an “unsigned” writing via an answer.
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disclosed [. . .], the court may make such orders with regard to the failure or refusal as are
just.’ New York courts therefore possess broad discretion to provide proportionate relief
to the party deprived of the lost evidence, such as precluding proof favorable to the
spoliator to restore balance to the litigation,requiring the spoliator to pay costs to the
injured party associated with the development of replacement evidence, or employing an
adverse inference instruction at the trial of the action. Where appropriate, a court can
impose the ultimate sanction of dismissing the action or striking responsive pleadings,
thereby rendering a judgment by default against the offending party.
Ortega v. City of New York, 9 N.Y.3d 69, 76 (2007) (citations omitted). Furthermore, “[w]here the
[electronically stored information] is determined to have been intentionally or willfully destroyed, the
relevancy of the destroyed documents is presumed.” Pegasus Aviation I, Inc. v. Varig Logistica S.A., 26
N.Y.3d 543, 547 (2015) (citing Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 220 (S.D.N.Y. 2003).
Defendants may also be compelled to bear all costs of their retrieval and production of electronically
stored information, including forensic examination and analysis of that information, as may appropriately
be requested by Plaintiff in discovery. U.S. Bank National Association v. Greenpoint Mortgage Funding,
Inc., 94 A.D.3d 58 (1st Dep’t 2012).
Some or all of the “remedial options” catalogued above are very likely to be the eventual subject
of motion practice in this action. Their logical prelude, for purposes of the present motion to dismiss, is
that Plaintiff’s claim for breach of contract be permitted to be maintained.
B. The Agreement Does Not Violate the Statute of Frauds
General Obligations Law § 5-701 codifies New York’s Statute of Frauds. It states in part,
“[e]very agreement, promise or undertaking is void, unless it or some note or memorandum thereof be in
writing,” provided the agreement meets one of several enumerated conditions. N.Y. G.O.L. § 5-701(a).
The statute further states that “[t]here is sufficient evidence that a contract has been made if: (a) [t]here is
evidence of electronic communication . .. sufficient to indicate that in such communication a contract
was made between the parties.” N.Y. G.O.L. § 5-701(b)(3).
“‘The Statute of Frauds was not enacted to afford persons a means of evading just obligations;
nor was it intended to supply a cloak of immunity to hedging litigants lacking integrity; nor was it
adopted to enable defendants to interpose the Statute as a bar to a contract fairly, and admittedly, made.’”
9
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FILED: NEW YORK COUNTY CLERK 08/12/2018 04:57 PM INDEX NO. 651460/2018
NYSCEF DOC. NO. 24 RECEIVED NYSCEF: 08/12/2018
Jenach v. Rabiza
Preview
FILED: NEW YORK COUNTY CLERK 08/12/2018 04:57 PM INDEX NO. 651460/2018 NYSCEF DOC. NO. 24 RECEIVED NYSCEF: 08/12/2018 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK __________________________________________ : DANIEL L. SCHWARTZ, : : Plaintiff, : : – against – : Index No.: 651460/2018 : WINSLOW & COMPANY LLC, : W & CO REAL ESTATE LLC, : WAYNE JOSHUA WINSLOW, and : ILONA WINSLOW, : : Defendants. : __________________________________________: PLAINTIFF’S MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS’ MOTION TO DISMISS THE AMENDED COMPLAINT 1 of 26 FILED: NEW YORK COUNTY CLERK 08/12/2018 04:57 PM INDEX NO. 651460/2018 NYSCEF DOC. NO. 24 RECEIVED NYSCEF: 08/12/2018 TABLE OF CONTENTS Page TABLE OF AUTHORITIES..................................................................................................................... iii PRELIMINARY STATEMENT ................................................................................................................ 1 ARGUMENT ............................................................................................................................................... 5 I. PLAINTIFF’S BREACH OF CONTRACT CLAIM SHOULD NOT BE DISMISSED .................................................................................................................................... 5 A. Plaintiff Has Properly Pleaded a Valid and Binding Agreement ........................................ 5 1. The Parties’ Course of Dealing Evidences a Binding Agreement ......................... 5 2. Plaintiff Does Not Concede that the Agreement is Unsigned ................................ 7 3. Defendants’ Deliberate Spoliation of Evidence of the Agreement Weighs Heavily Against Dismissal ....................................................................... 8 B. The Agreement Does Not Violate the Statute of Frauds .................................................... 9 1. The Agreement is a “Duly Licensed Real Estate Broker” Contract and is Not Subject to the Statute of Frauds ........................................... 10 2. The Agreement is Capable of Being Performed Within One Year...................... 11 II. PLAINTIFF’S CLAIMS FOR CONVERSION, UNJUST ENRICHMENT, QUANTUM MERUIT AND PROMISSORY ESTOPPEL SHOULD NOT BE DISMISSED ........................................................................................................................... 12 A. Plaintiff Properly Pleads These Claims in the Alternative ............................................... 12 B. None of the “Quasi-Contractual” Claims Should Be Dismissed ...................................... 13 1. Unjust Enrichment and Quantum Meruit are Properly Pleaded .......................... 13 2. Promissory Estoppel is Properly Pleaded ............................................................ 14 3. Conversion is Properly Pleaded ........................................................................... 15 III. PLAINTIFF’S STATUTORY CLAIMS SHOULD NOT BE DISMISSED ........................... 15 IV. PLAINTIFF’S CLAIMS AGAINST INDIVIDUAL DEFENDANTS JOSH WINSLOW AND ILONA WINSLOW SHOULD NOT BE DISMISSED ............................. 17 A. The Individual Defendants May Be Held Personally Liable Under New York Law .......................................................................................................................... 18 B. Plaintiff Properly Pleads a Basis for Personal Liability Against the Individual Defendants ....................................................................................................... 20 CONCLUSION .......................................................................................................................................... 21 ii 2 of 26 FILED: NEW YORK COUNTY CLERK 08/12/2018 04:57 PM INDEX NO. 651460/2018 NYSCEF DOC. NO. 24 RECEIVED NYSCEF: 08/12/2018 TABLE OF AUTHORITIES Page(s) Cases Ackerman v. Vertical Club Corp. 94 A.D.2d 665 (1st Dep’t 1983) ...................................................................................................... 18 Allianz Underwriters Ins. Co. v. Landmark Ins. Co. 13 A.D.3d 172 (1st Dep’t 2004) ........................................................................................................ 5 Amaro v. Gani Realty Corp. 60 A.D.3d 491 (1st Dep’t 2009) ........................................................................................................ 5 Brown Bros. Electrical Contractors, Inc. v. Beam Construction Corp. 41 N.Y.2d 397 (1977) .......................................................................................................................... 6 Buckley v. 112 Central Park South 136 N.Y.S.2d 233 (1st Dep’t 1954) ........................................................................................... 18, 20 Capin & Associates, Inc. v. 599 West 188th Street, Inc. 2015 Slip Op 30386[U] (Sup. Ct., N.Y. Cnty. 2015) ........................................................ 12, 13, 19 Chan v. Kwok 2016 Slip Op 31538[U] (Sup. Ct., N.Y. Cnty. 2016) ...................................................................... 6 Cron v. Hargro Fabrics 91 N.Y.2d 362 (1998) ........................................................................................................................ 11 Curtis Props. Corp. v. Greif Cos. 236 A.D.2d 237 (1st Dep’t 1997) .................................................................................................... 13 Day Realty Corp. v. Chera 308 A.D.2d 148 (1st Dep’t 2003) .................................................................................................... 12 Flores v. Lower East Side Service Center, Inc. 4 N.Y.3d 363 (2005) ............................................................................................................................ 6 Hoag v. Chancellor, Inc. 246 A.D.2d 224 (1st Dep’t 1998) .............................................................................................. 18, 19 Jenach v. Rabizadeh 22 N.Y.3d 470 (2013) ........................................................................................................................ 10 Joseph Sternberg, Inc. v. Walber 36th Street Association 187 A.D.2d 225 (1st Dep’t 1993) .................................................................................................... 13 Kowalchuk v. Stroup 61 A.D.3d 118 (1st Dep’t 2009) ........................................................................................................ 6 Lorio v. Northern Building Products, Inc. iii 3 of 26 FILED: NEW YORK COUNTY CLERK 08/12/2018 04:57 PM INDEX NO. 651460/2018 NYSCEF DOC. NO. 24 RECEIVED NYSCEF: 08/12/2018 2008 N.Y. Slip Op 30477 (Sup. Ct., N.Y. Cnty. 2008) ................................................................ 13 MatlinPatterson ATA Holdings LLC v. Fed. Express Corp. 87 A.D.3d 836 (1st Dep’t 2011) ...................................................................................................... 14 Mayer v. Marron 2015 Slip Op 32811[U] (Sup. Ct., N.Y. Cnty. 2015) ........................................................ 5, 6, 7, 14 Morris Cohon & Co. v. Russell 23 N.Y.2d 569 (1969) ........................................................................................................................ 10 Niyazov v. Park Fragrance, LLC 2017 Slip Op 30610[U] (Sup. Ct., N.Y. Cnty. 2014) ...................................................................... 5 Options Group, Inc. v. Vyas 91 A.D.3d 446 (1st Dep’t 2012) ........................................................................................................ 6 Ortega v. City of New York 9 N.Y.3d 69 (2007) .............................................................................................................................. 9 Payne v. White 101 A.D.2d 975 (3rd Dep’t 1984).................................................................................................... 15 Pegasus Aviation I, Inc. v. Varig Logistica S.A. 26 N.Y.3d 543 (2015) .......................................................................................................................... 9 Polargrid LLC v. Videsh Sanchar Nigam Ltd. 2006 WL 903184 (S.D.N.Y. April 7, 2006) ................................................................................... 14 Posson v. Przestrzelski 111 A.D.3d 1235 (3rd Dep’t 2013) ................................................................................................. 10 Puppa v. G. Garrity Contr. Corp. 2017 Slip Op 30654[U] (Sup. Ct., N.Y. Cnty. 2017) ...................................................................... 6 Raptis v. Giamo/Eisidler Real Estate Services, Inc. 2010 N.Y. Slip Op. 32097 (Sup. Ct., N.Y. Cnty. 2010) ............................................................... 15 Resource Finance Co. v. Cynergy Data LLC 106 A.D.3d 562 (1st Dep’t 2013) .................................................................................................... 13 Sage Realty Corp. v. Proskauer Rose 275 A.D.2d 11 (1st Dep’t 2000) ........................................................................................................ 8 Saran v. Shanghai Chengtou (USA), LLC 2018 Slip Op 30292[U] (Sup. Ct., N.Y. Cnty. 2018) .............................................................. 10, 13 Serbetcioglu v. R.N. Joseph Fine Jewelry LLC NY Slip Op 30687[U] (Sup. Ct., N.Y. Cnty. 2011) ...................................................................... 19 Sibbald v. Bethlehem Iron Co. iv 4 of 26 FILED: NEW YORK COUNTY CLERK 08/12/2018 04:57 PM INDEX NO. 651460/2018 NYSCEF DOC. NO. 24 RECEIVED NYSCEF: 08/12/2018 83 N.Y. 378 (1881) ............................................................................................................................ 12 Skillgames, LLC v. Brody 1 A.D.3d 247 (1st Dep’t 2003)........................................................................................................... 5 Steve Elliot, LLC v. Foxboro Productions 28 Misc.3d 38 (2nd Dep’t 2010) ...................................................................................................... 10 Strategic Alliance Partners, LLC v. Dress Barn 386 F. Supp.2d 312 (2005) ............................................................................................................... 13 U.S. Bank National Association v. Greenpoint Mortgage Funding, Inc. 94 A.D.3d 58 (1st Dep’t 2012)........................................................................................................... 9 Walkovsky v. Carlton 18 N.Y.2d 414 (1966) ........................................................................................................................ 19 Zubulake v. UBS Warburg LLC 220 F.R.D. 212 (S.D.N.Y. 2003) ....................................................................................................... 9 Statutes C.P.L.R. § 301 ............................................................................................................................................ 21 C.P.L.R. § 3017 ................................................................................................................................ 4, 12, 17 C.P.L.R. § 3211 ................................................................................................................................... passim New York General Obligations Law § 5-701 ............................................................................. 9, 10, 11 New York City Administrative Code, Title 20, Chapter 10 ................................................. 1, 4, 15, 16 v 5 of 26 FILED: NEW YORK COUNTY CLERK 08/12/2018 04:57 PM INDEX NO. 651460/2018 NYSCEF DOC. NO. 24 RECEIVED NYSCEF: 08/12/2018 PRELIMINARY STATEMENT Plaintiff Daniel L. Schwartz (“Plaintiff”) respectfully submits this memorandum of law (the “Opposition Memo”) in opposition to the motion to dismiss the amended complaint (the “Complaint”) of defendants Winslow & Company, LLC (“Winslow & Company”), W & Co Real Estate LLC (“W & Co”), Wayne Joshua Winslow (“Josh Winslow”) and Ilona Winslow (together “Defendants”). Defendants’ chief argument in support of dismissal is that Plaintiff’s Complaint is based on an “undated and unsigned” writing that is not binding, and violates the Statute of Frauds. Memorandum of Law in Support of Defendants Winslow & Company LLC, W & Co Real Estate LLC, Wayne Joshua Winslow, and Ilona Winslow’s Motion to Dismiss (hereinafter “Def. Memo”) at 1. Defendants’ argument misreads the Complaint, neglects almost entirely to read the law, and is fatally flawed on multiple grounds. In fact, Defendants’ very starting premise, that “Plaintiff’s entire theory of recovery is based on an undated ‘contract,’” Def. Memo at 2, is wishful thinking. This action has not one, but three, key themes. First, it is indeed a nonpayment action, premised on Defendants’ deliberate breach of a binding written agreement. Plaintiff has been paid nothing to date at least three commercial real estate deals he brokered while working for Winslow & Company, and only partly paid on another, where Defendants helped themselves to all of their own commissions and all of Plaintiff’s commissions too. Second, this is an action about wrongful retaliation and illegal labor practices in violation of New York’s Freelance Isn’t Free Act. Defendants not only completely refused to pay Plaintiff any commissions, but also pressured, threatened, intimidated, and ultimately fired him merely for trying to recover them. Third, this is an action about Defendants’ intentional spoliation of evidence. Defendants destroyed emails to hide evidence of Plaintiff’s agreement and the commissions they owe him. Their arguments, and the Court’s disposition of the present motion to dismiss, must be read in the light of this damning and highly culpable conduct. 1 6 of 26 FILED: NEW YORK COUNTY CLERK 08/12/2018 04:57 PM INDEX NO. 651460/2018 NYSCEF DOC. NO. 24 RECEIVED NYSCEF: 08/12/2018 Defendants never dispute that Plaintiff worked as a broker for Winslow & Company for almost ten years. They never dispute that Plaintiff performed all of the work he claims on all of the relevant real estate deals. They do not dispute that all the deals closed, or that Defendants received all of the commissions in question. And they do not dispute that Plaintiff has received zero commissions to date or that he has faced unconscionable conduct trying to recover those commissions. Read in this light, Defendants’ myopic reliance on an “unsigned” agreement is a revealing self-indictment. The parties’ agreement is binding. First, Plaintiff pleads sufficient facts demonstrating a valid and binding agreement, in particular, that the parties honored the July 5, 2016 agreement (the “Agreement”) via their ensuing course of conduct. Compl. ¶¶ 25-27. Plaintiff pleads a specific time period of at least six months (July 2016 until at least December 2016, Compl. ¶ 26), and enumerates a series of commercial real estate deals he brokered (“Laruicci,” “RDW,” “Wellpass,” “Sequoia” and others, Compl. ¶ 27), in which Defendants honored the core material term of the Agreement – the commission split. Under settled New York law, this is more than sufficient evidence of agreement for Plaintiff to ultimately prevail on his breach of contract claim, and certainly more than adequate for Plaintiff to survive a motion to dismiss under CPLR § 3211(a)(7). New York courts have repeatedly held that evidence of the parties’ conduct in honoring an agreement is weightier than an unsigned writing in determining that a binding agreement exists. See infra Section I.A.1, pp. 5-7. Second, Defendants’ argument misreads the Complaint, for Plaintiff has not pleaded that the parties never signed the Agreement. Instead, Plaintiff pleads (a) that a valid and binding written contract exists, Compl. ¶ 66; (b) that Defendants intentionally destroyed evidence of that contract prior to Plaintiff’s filing of this action, by hunting for and deleting emails (including the very email reflecting the Agreement) from Winslow & Company email accounts, Compl. ¶¶ 56-64; and (c) that Plaintiff was nevertheless able to retain and attach the copy of the Agreement attached as Exhibit A of the Complaint, which is unsigned, Compl. ¶ 5. 2 7 of 26 FILED: NEW YORK COUNTY CLERK 08/12/2018 04:57 PM INDEX NO. 651460/2018 NYSCEF DOC. NO. 24 RECEIVED NYSCEF: 08/12/2018 To be clear, it is ultimately of no consequence whether or not the Agreement was signed, because (a) the parties have honored the Agreement in fact, see infra Section I.A.1, pp. 5-7; and (b) a signed writing is not required in the context of a real estate brokerage agreement, see infra Section I.B.1, pp. 10- 11. Nevertheless, by arguing that no signed writing exists, Defendants address themselves to the complaint they imagine Plaintiff has submitted, rather than the Complaint Plaintiff actually has submitted. Defendants’ argument, based on their error in reading the Complaint, should be rejected. See infra Section I.A.2, p. 7. Third, Defendants’ arguments to dismiss the breach of contract claim must be considered in light of their intentional spoliation of evidence. Defendants should not be permitted to benefit from their misconduct by arguing that a signed writing does not exist after intentionally destroying evidence of that Agreement. Ample remedies exist under New York law for addressing Defendants’ intentional spoliation of evidence, which Plaintiff expects to raise at the appropriate juncture. In the meanwhile, Plaintiff should be permitted to proceed with his breach of contract claim. See infra Section I.A.3, pp. 8-9. The Statute of Frauds does not apply to this agreement. Defendants’ argument that Plaintiff’s breach of contract claim violates the Statute of Frauds is simply wrong on the law. Real estate broker agreements are specifically excluded from the Statute, and are fully enforceable when not in writing. But even if the Statute could rightly be invoked here, the Agreement is capable on its face of being performed within a year, and therefore still would satisfy the Statute of Frauds. See infra Section I.B, pp. 9-11. Plaintiff’s additional common law claims are well-pleaded. In addition to claims for breach of contract and the implied duty of good faith and fair dealing, Plaintiff brings common law claims for (1) conversion; (2) unjust enrichment; (3) quantum meruit; and (4) promissory estoppel. Defendants’ half-hearted response to all four of these common law claims is that they are duplicative of, and/or barred by, his breach of contract claim. That is not the case. 3 8 of 26 FILED: NEW YORK COUNTY CLERK 08/12/2018 04:57 PM INDEX NO. 651460/2018 NYSCEF DOC. NO. 24 RECEIVED NYSCEF: 08/12/2018 Plaintiff pleads his common law claims in the alternative. Under CPLR § 3017(a), and considered here on a pre-discovery motion to dismiss pursuant to CPLR § 3211(a), pleading claims in the alternative is standard and permitted. The larger context here also bears repeating: Plaintiff has been paid nothing on at least three deals he brokered while working for Winslow & Company, and only partially paid on another. Even if Plaintiff’s breach of contract claim were somehow to fail (and it is unclear on what basis it would fail), Defendants would still remain in possession of more than half a million dollars of brokerage fees Plaintiff unquestionably earned while working in association with Winslow & Company.1 His claims for conversion, unjust enrichment, quantum meruit and promissory estoppel are therefore necessary and appropriate in order to ensure recovery of the unpaid fees. As each of these claims is well- pleaded – each of the elements of the cause of action is properly made out under the allegations of the Complaint – none should be dismissed. See infra Section II, pp. 11-15. The statutory claims for retaliation and wrongful payment practices are well-pleaded. Plaintiff seeks approximately two million dollars, plus costs, for violations of Title 20, Chapter 10 of New York City’s Administrative Code, the Freelance Isn’t Free Act, which protects freelance workers from unfair retaliation and other wrongful payment practices. Despite alleging conduct that is textbook- tailored to fit the prohibitions of the statute, Defendants argue that Plaintiff’s allegations are “conclusory and devoid of any factual support.” Opp. Memo at 7. It bears asking what degree of detail Defendants would not label as “conclusory and devoid of factual support.” Plaintiff’s pleadings are highly detailed as to the wrongful payment practices and retaliatory actions Defendants have taken against him. First and foremost, Defendants terminated Plaintiff from his association with Winslow & Company for trying to obtain his fees, conduct that is specifically prohibited by the statute. Several other acts are alleged in detail. See infra Section III, pp. 15-17. 1 Note that this remains true even based upon Defendants’ answer to Plaintiff’s original (pre-amended) complaint (the “Answer”), in which Defendants contend that an earlier 2008 written agreement governs the parties. Plaintiff would still be owed several hundred thousand dollars under this prior agreement, assuming it was ever effective and had not been superseded. Plainly this action should not be dismissed under the circumstances. 4 9 of 26 FILED: NEW YORK COUNTY CLERK 08/12/2018 04:57 PM INDEX NO. 651460/2018 NYSCEF DOC. NO. 24 RECEIVED NYSCEF: 08/12/2018 The individual defendants, Josh and Ilona Winslow, are personally liable for acts taken outside the scope of their agency. Defendants are incorrect in their assertion that the individual defendants, Josh and Ilona Winslow, cannot be held liable here. While it is true that they may not be held liable for breach of contract, Plaintiff’s claims for breach of contract are not even directed against them. Instead, Josh and Ilona Winslow are individually liable for illegal and predatory acts taken for their personal gain, and outside the scope of their agency as owners and officers of Winslow & Company. These acts include harassment and retaliation against Plaintiff in violation of New York statute, and deliberate destruction of evidence relevant to this action. Plaintiff’s claims against the individual defendants rest on well-settled law and should not be dismissed. See infra Section IV, pp. 17-20. ARGUMENT In determining a motion to dismiss for failure to state a cause of action, the court must accept as true the facts alleged in the complaint, as well as all reasonable inferences that may be gleaned from those facts. Skillgames, LLC v. Brody, 1 A.D.3d 247, 250 (1st Dep’t 2003); Amaro v. Gani Realty Corp., 60 A.D.3d 491 (1st Dep’t 2009); Niyazov v. Park Fragrance, LLC, 2017 Slip Op 30610[U], *2 (Sup. Ct., N.Y. Cnty. 2014). The complaint must be construed in the light most favorable to the plaintiff. Mayer v. Marron, 2015 Slip Op 32811[U], *3 (Sup. Ct., N.Y. Cnty. 2015) (citing Allianz Underwriters Ins. Co. v. Landmark Ins. Co., 13 A.D.3d 172, 174 (1st Dep’t 2004)). The court is not permitted to assess the merits of the complaint or any of its factual allegations, but may only determine if,assuming the truth of the facts alleged, the complaint states the elements of a legally cognizable cause of action. Niyazov, 2017 Slip Op 30610[U], *2. I. PLAINTIFF’S BREACH OF CONTRACT CLAIM SHOULD NOT BE DISMISSED A. Plaintiff Has Properly Pleaded a Valid and Binding Agreement 1. The Parties’ Course of Dealing Evidences a Binding Agreement Defendants argue the Agreement is unenforceable against them because it is “undated and unsigned,” Def. Memo at 1, but their argument is flatly contradicted by longstanding precedent from New York’s Court of Appeals, as well as this Department, holding that an unsigned agreement is enforceable if 5 10 of 26 FILED: NEW YORK COUNTY CLERK 08/12/2018 04:57 PM INDEX NO. 651460/2018 NYSCEF DOC. NO. 24 RECEIVED NYSCEF: 08/12/2018 so demonstrated by the parties’ course of dealing. Brown Bros. Electrical Contractors, Inc. v. Beam Construction Corp., 41 N.Y.2d 397 (1977) (finding the “course of conduct and communications” between the parties “created a legally enforceable agreement,” despite an unsigned contract); Flores v. Lower East Side Service Center, Inc., 4 N.Y.3d 363, 368-69 (2005) (“[w]e have long held that a contract may be valid even if it is not signed by the party to be charged . . . an unsigned contract may be enforceable, provided there is objective evidence establishing that the parties intended to be bound”) (citations omitted); Options Group, Inc. v. Vyas, 91 A.D.3d 446, 447 (1st Dep’t 2012) (“even if plaintiff never formally executed the . . . [agreement], the record demonstrates that both parties intended to be bound by the agreement, and it is therefore enforceable”); Kowalchuk v. Stroup, 61 A.D.3d 118, 125 (1st Dep’t 2009) (finding emails among the parties and a partially executed agreement sufficient evidence of contract); Mayer v. Marron, 2015 Slip Op 32811[U], *7 (Sup. Ct., N.Y. Cnty. 2015) (finding emails and unsigned agreement sufficient evidence of agreement to survive motion to dismiss). In determining whether an unsigned writing has formed the basis of an agreement between the parties, courts must look to the course of dealing between the parties. Puppa v. G. Garrity Contr. Corp., 2017 Slip Op 30654[U], *9 (Sup. Ct., N.Y. Cnty. 2017) (“[i]n determining whether the parties entered into a contractual agreement and what were its terms, it is necessary to look . . . to the objective manifestations of the intent of the parties as gathered by their expressed words and deeds”) (quoting Flores, 4 N.Y.3d at 369); Chan v. Kwok, 2016 Slip Op. 31538[U], *4 (Sup. Ct., N.Y. Cnty. 2016) (“[t]he parties’ course of conduct may be looked at to ‘determine whether there was a meeting of the minds sufficient to give rise to an enforceable contract’”) (quoting Flores, 4 N.Y.3d at 370). Here, the Complaint is crystal clear in showing an enforceable agreement stemming from the July 5, 2016 email and attached independent contractor agreement, and subsequent dealings between the parties. In the email, defendant Josh Winslow writes, in relevant part, “Here is what we decided. If you agree, starting immediately your split will be as follows.” Compl. ¶ 24 (emphasis added). Mr. Winslow then inlines the commission split – which is the very raison d’être of the entire agreement – into the 6 11 of 26 FILED: NEW YORK COUNTY CLERK 08/12/2018 04:57 PM INDEX NO. 651460/2018 NYSCEF DOC. NO. 24 RECEIVED NYSCEF: 08/12/2018 email, with the same commission split then repeated in the attached independent contract agreement. Compl. ¶ 24; Exhibit A at p. 6. While this email message alone speaks powerfully to the existence of an agreement, an enforceable agreement becomes incontrovertible based on the parties’ subsequent conduct. The parties immediately honor the commission split in the Agreement for at least the next six months, over a series of deals that are cited by name in the Complaint. Compl. ¶¶ 25-27. Finally, Defendants’ spoliation of evidence of the Agreement is itself conduct attesting to the validity of the Agreement, as Defendants would have no motivation to search for and delete evidence of a contract that was a nullity. As the Complaint is more than sufficient on its face to state a claim for breach of contract based on the parties’ dealings, Plaintiff’s first cause of action for breach of contract should not be dismissed. 2. Plaintiff Does Not Concede that the Agreement is Unsigned As discussed above, Defendants argue Plaintiff’s “entire theory of recovery” here is based on an unsigned contract. In fact, Plaintiff has not pleaded that the contract is unsigned, and discovery would be required in order to determine this issue of fact. Plaintiff’s argument is that the contract is binding whether or not it is signed. For purposes of the present motion, however, it would be error to dismiss the Complaint on the basis of an “unsigned” contract when Plaintiff does not plead an unsigned contract, for the Complaint must be construed in the light most favorable to the plaintiff. Mayer v. Marron, 2015 Slip Op 32811[U], *3 (Sup. Ct., N.Y. Cnty. 2015). The instrument attached as Exhibit A of the Complaint is the copy of the Agreement that was available to Plaintiff upon commencing this action, and that instrument is indeed unsigned. Compl. ¶ 5. However, Plaintiff pleads that Defendants deleted a copy of the email reflecting the Agreement, Compl. ¶ 5, and that Defendants ripped up a paper copy of the Agreement during a meeting on October 4, 2017, and threw it in his face, Compl. ¶ 36. It is not know to Plaintiff what other copies of the Agreement may exist, what other copies of the Agreement may or may not have been hidden or destroyed, or whether a 7 12 of 26 FILED: NEW YORK COUNTY CLERK 08/12/2018 04:57 PM INDEX NO. 651460/2018 NYSCEF DOC. NO. 24 RECEIVED NYSCEF: 08/12/2018 signed copy of the Agreement will ultimately ever be located. As Plaintiff’s theory of recovery does not depend on a signed writing anyway, the breach of contract claim should not be dismissed on the basis of an “unsigned” writing. 3. Defendants’ Deliberate Spoliation of Evidence of the Agreement Weighs Heavily Against Dismissal Defendants have the temerity to argue Plaintiff’s breach of contract claim should be dismissed on the basis of an “undated and unsigned” agreement after they intentionally destroyed evidence of that agreement by systematically deleting Plaintiff’s Winslow & Company emails, including the email reflecting the Agreement. Dismissing Plaintiff’s claim for breach of contract under these circumstances would be inequitable, because it would permit Defendants to benefit from their wrongful actions as spoliators. See Sage Realty Corp. v. Proskauer Rose, 275 A.D.2d 11, 16-18 (1st Dep’t 2000) (“elementary fairness” warranted finding against spoliator where “the deliberate nature of the conduct . . . effectively impede[d] the ability of the deprived party to assert a claim or defense”). Plaintiff is, instead, entitled to the benefit of discovery in seeking all available evidence of the Agreement, as well as all available evidence of its destruction by Defendants. Permitting the breach of contract claim to proceed also permits Plaintiff to seek those remedial actions that are available to him on the basis of the spoliation, and which this court holds the power to order, at an appropriate time.2 As New York’s Court of Appeals has previously observed: When parties involved in litigation engage in the destruction of evidence, a number of remedial options are provided by existing New York statutory and common law. Under CPLR 3126, if a court finds that a party destroyed evidence that ‘ought to have been 2 Cf. CPLR § 3211(d), which states: “Facts unavailable to opposing party. Should it appear from affidavits submitted in opposition to a motion made under subdivision (a) or (b) that facts essential to justify opposition may exist but cannot then be stated, the court may deny the motion, allowing the moving party to assert the objection in his responsive pleading, if any, or may order a continuance to permit further affidavits to be obtained or disclosure to be had and may make such other order as may be just.” Here, Plaintiff has not elected to submit additional affidavits because his pleadings suffice in identifying facts that are unavailable to him due to Defendants’ spoliation. Nevertheless, the Court should similarly deny Defendants’ motion, as is counseled by CPLR § 3211(d), on the basis of Plaintiff’s Complaint. Defendants may then assert their argument of an “unsigned” writing via an answer. 8 13 of 26 FILED: NEW YORK COUNTY CLERK 08/12/2018 04:57 PM INDEX NO. 651460/2018 NYSCEF DOC. NO. 24 RECEIVED NYSCEF: 08/12/2018 disclosed [. . .], the court may make such orders with regard to the failure or refusal as are just.’ New York courts therefore possess broad discretion to provide proportionate relief to the party deprived of the lost evidence, such as precluding proof favorable to the spoliator to restore balance to the litigation,requiring the spoliator to pay costs to the injured party associated with the development of replacement evidence, or employing an adverse inference instruction at the trial of the action. Where appropriate, a court can impose the ultimate sanction of dismissing the action or striking responsive pleadings, thereby rendering a judgment by default against the offending party. Ortega v. City of New York, 9 N.Y.3d 69, 76 (2007) (citations omitted). Furthermore, “[w]here the [electronically stored information] is determined to have been intentionally or willfully destroyed, the relevancy of the destroyed documents is presumed.” Pegasus Aviation I, Inc. v. Varig Logistica S.A., 26 N.Y.3d 543, 547 (2015) (citing Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 220 (S.D.N.Y. 2003). Defendants may also be compelled to bear all costs of their retrieval and production of electronically stored information, including forensic examination and analysis of that information, as may appropriately be requested by Plaintiff in discovery. U.S. Bank National Association v. Greenpoint Mortgage Funding, Inc., 94 A.D.3d 58 (1st Dep’t 2012). Some or all of the “remedial options” catalogued above are very likely to be the eventual subject of motion practice in this action. Their logical prelude, for purposes of the present motion to dismiss, is that Plaintiff’s claim for breach of contract be permitted to be maintained. B. The Agreement Does Not Violate the Statute of Frauds General Obligations Law § 5-701 codifies New York’s Statute of Frauds. It states in part, “[e]very agreement, promise or undertaking is void, unless it or some note or memorandum thereof be in writing,” provided the agreement meets one of several enumerated conditions. N.Y. G.O.L. § 5-701(a). The statute further states that “[t]here is sufficient evidence that a contract has been made if: (a) [t]here is evidence of electronic communication . .. sufficient to indicate that in such communication a contract was made between the parties.” N.Y. G.O.L. § 5-701(b)(3). “‘The Statute of Frauds was not enacted to afford persons a means of evading just obligations; nor was it intended to supply a cloak of immunity to hedging litigants lacking integrity; nor was it adopted to enable defendants to interpose the Statute as a bar to a contract fairly, and admittedly, made.’” 9 14 of 26 FILED: NEW YORK COUNTY CLERK 08/12/2018 04:57 PM INDEX NO. 651460/2018 NYSCEF DOC. NO. 24 RECEIVED NYSCEF: 08/12/2018 Jenach v. Rabiza